Study On The Investment Arbitration Mechanism Of The Energy Charter Treaty

Energy is the important topic of common concern to today's international community; especially occurred three energy crisis after World War II, prompting countries around the world find a series of ways to resolve the issues of energy supplying and consumption. The Energy Charter Treaty had been enacted when political and economic crisis of the former Soviet Union, which threaten the energy supply of the European Economic Community and other Western European countries. The purpose of ECT is to protect the security and stability of international energy cooperation. ECT as a legally binding law system is very complicated, and in particular, Article 26 - Investment Arbitration clause. The clause had a profound impact on the treaty practice of the international community, or even become a model to resolve the investment disputes of investors– states in the bilateral investment treaty. China wants to develop, which have balanced the relationship between energy and development, have understood the rules of energy cooperation, have participated in the competition of the international energy market,have safeguarded the energy security.The provisions of the ECT provides that the subjects of dispute and investment, which directly determine the criteria of the ECT's application. Therefore, we should take seriously about the definition and position of investor and state. Secondly, the article summarizes the basic procedures in investment arbitration and the cases which as follow can't apply the investment arbitration:environmental dispute,trading dispute,transit dispute and tax dispute. Investment arbitration mechanism is the most distinctive provision of the ECT, it unifies the inconsistencies in of the verdicts. To give investors the right to relief, it protects the investment in energy sector against political risk. Progress still includes insufficiency, for example ignoring the public interests and challenging the authority of the host country. According these insufficiency,this article suggested to reform investment arbitration mechanism, which have followed the principle of national sovereignty, principle of good faith and rationality. Finally, how to protect the energy security in the international energy cooperation is important.